Industrial Policy


Encompasses traditional government policies intended to provide a favorable economic climate for the development of industry in general or specific industrial sectors. Instruments of industrial policy may include:

  • tax incentives to promote investments or exports,
  • direct or indirect subsidies,
  • special financing arrangements,
  • protection against foreign competition,
  • worker training programs,
  • regional development programs,
  • assistance for research and development, and
  • measures to help small business firms.

Historically, the term industrial policy has been associated with some degree of centralized economic planning or indicative planning, but this connotation is not always intended by its contemporary advocates.

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